Aura: Designing Strategy and Status in Saudi Arabia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aura: Designing Strategy and Status in Saudi Arabia
This case gives students the opportunity to explore the concept of organizational status as a competitive asset. CEO Noura Abdullah of Saudi furniture retailer Aura founded her company as a middle-market furniture and home goods store offering affordable yet design-savvy products. By many accounts, both tangible and intangible, Aura had been a success. By late 2014, Aura had drawn considerable attention from several high-status Saudi wedding planners and media outlets, including Harper's Bazaar Interiors, Elle DA?cor, and Martha Stewart Weddings. This attention yielded unusually strong conversion rates (the percentage of visitors to the store who made a purchase). Foot traffic, on the other hand, remained unexpectedly low, leading Abdullah to wonder whether the high-status affiliations had unintentionally signaled to mid-market consumers that they would not be able to afford Aura's products, keeping such customers away. Students will decide, along with Abdullah, how to handle this unique "problem" as Aura enters a growth phase to other Saudi and Middle Eastern markets.
Authors :: Ned Smith, Andrea Meyer
Topics :: Strategy & Execution
Tags :: Growth strategy, Market research, Organizational culture, Public relations, Social platforms, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Aura: Designing Strategy and Status in Saudi Arabia" written by Ned Smith, Andrea Meyer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aura Abdullah facing as an external strategic factors. Some of the topics covered in Aura: Designing Strategy and Status in Saudi Arabia case study are - Strategic Management Strategies, Growth strategy, Market research, Organizational culture, Public relations, Social platforms and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aura: Designing Strategy and Status in Saudi Arabia casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, geopolitical disruptions, technology disruption, cloud computing is disrupting traditional business models, there is backlash against globalization,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Aura: Designing Strategy and Status in Saudi Arabia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aura: Designing Strategy and Status in Saudi Arabia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aura Abdullah, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aura Abdullah operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Aura: Designing Strategy and Status in Saudi Arabia can be done for the following purposes –
1. Strategic planning using facts provided in Aura: Designing Strategy and Status in Saudi Arabia case study
2. Improving business portfolio management of Aura Abdullah
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aura Abdullah
Strengths Aura: Designing Strategy and Status in Saudi Arabia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aura Abdullah in Aura: Designing Strategy and Status in Saudi Arabia Harvard Business Review case study are -
Innovation driven organization
– Aura Abdullah is one of the most innovative firm in sector. Manager in Aura: Designing Strategy and Status in Saudi Arabia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Aura Abdullah has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aura Abdullah has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Aura Abdullah is one of the leading recruiters in the industry. Managers in the Aura: Designing Strategy and Status in Saudi Arabia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Aura Abdullah
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aura Abdullah does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Aura Abdullah in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Aura Abdullah are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– Aura: Designing Strategy and Status in Saudi Arabia firm has clearly differentiated products in the market place. This has enabled Aura Abdullah to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Aura Abdullah to invest into research and development (R&D) and innovation.
Strong track record of project management
– Aura Abdullah is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Aura Abdullah has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Aura: Designing Strategy and Status in Saudi Arabia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Aura Abdullah in the sector have low bargaining power. Aura: Designing Strategy and Status in Saudi Arabia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aura Abdullah to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Aura Abdullah has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aura Abdullah to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Aura: Designing Strategy and Status in Saudi Arabia Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Aura: Designing Strategy and Status in Saudi Arabia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aura: Designing Strategy and Status in Saudi Arabia are -
Products dominated business model
– Even though Aura Abdullah has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Aura: Designing Strategy and Status in Saudi Arabia should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Aura Abdullah needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aura: Designing Strategy and Status in Saudi Arabia, in the dynamic environment Aura Abdullah has struggled to respond to the nimble upstart competition. Aura Abdullah has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aura: Designing Strategy and Status in Saudi Arabia, is just above the industry average. Aura Abdullah needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Aura: Designing Strategy and Status in Saudi Arabia, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Ned Smith, Andrea Meyer suggests that, Aura Abdullah is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Aura Abdullah has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Aura Abdullah has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Aura Abdullah even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Aura: Designing Strategy and Status in Saudi Arabia HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Aura Abdullah has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Aura: Designing Strategy and Status in Saudi Arabia HBR case study mentions - Aura Abdullah takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Aura: Designing Strategy and Status in Saudi Arabia that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Aura: Designing Strategy and Status in Saudi Arabia can leverage the sales team experience to cultivate customer relationships as Aura Abdullah is planning to shift buying processes online.
Opportunities Aura: Designing Strategy and Status in Saudi Arabia | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Aura: Designing Strategy and Status in Saudi Arabia are -
Using analytics as competitive advantage
– Aura Abdullah has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Aura: Designing Strategy and Status in Saudi Arabia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aura Abdullah to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Aura Abdullah can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aura Abdullah can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Aura Abdullah can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Aura Abdullah can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Aura Abdullah can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aura Abdullah can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Aura: Designing Strategy and Status in Saudi Arabia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Aura Abdullah can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aura: Designing Strategy and Status in Saudi Arabia suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Aura Abdullah can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Manufacturing automation
– Aura Abdullah can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aura Abdullah can use these opportunities to build new business models that can help the communities that Aura Abdullah operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Aura Abdullah in the consumer business. Now Aura Abdullah can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Aura Abdullah can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aura Abdullah in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Threats Aura: Designing Strategy and Status in Saudi Arabia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aura: Designing Strategy and Status in Saudi Arabia are -
High dependence on third party suppliers
– Aura Abdullah high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Aura Abdullah demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Aura Abdullah needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Aura Abdullah
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Aura Abdullah.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Aura Abdullah will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Aura Abdullah needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aura Abdullah with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aura Abdullah can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Aura Abdullah can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aura: Designing Strategy and Status in Saudi Arabia, Aura Abdullah may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aura Abdullah can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Aura: Designing Strategy and Status in Saudi Arabia .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Aura Abdullah business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Aura: Designing Strategy and Status in Saudi Arabia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Aura: Designing Strategy and Status in Saudi Arabia needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Aura: Designing Strategy and Status in Saudi Arabia is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Aura: Designing Strategy and Status in Saudi Arabia is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Aura: Designing Strategy and Status in Saudi Arabia is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Aura Abdullah needs to make to build a sustainable competitive advantage.
